Apple's AirPods Get 85 Percent Of Wireless Earbud Revenue

When Apple released the iPhone 7 last year, critics dinged the smartphone for dropping a standard 3.5mm headphone jack. But thanks to strong performance from its AirPods wireless earbuds, the company may have been further ahead of the curve.

AirPods currently make up 85 percent of totally wireless earbud revenues, according to analyst firm NPD Group.

The totally wireless earbud space, which refers to earbud models that aren’t connected by a cord, has seen similar gains in market share. NPD estimates that at least 900,000 units were sold since the start of 2017.

NPD also notes some other trends in the wireless headphone space, pointing out that companies increasingly want to add additional features beyond audio quality onto their earbuds:

New entrants will have to provide some differentiation in features, sound quality, or associated services and applications in order to stand out. Consumer reception of wireless earbuds is still forming, even as their use case continues to evolve. As Alexa skills and other voice-first content diversifies, headphones, including totally wireless earbuds, are the leading candidate to be the next piece of hardware to drive digital assistant adoption.

NPD’s data comes with some qualifiers, as full wireless earbuds are a small section of the larger headphone market. Plus, it’s a market that has seen little attention from major manufacturers. Outside of Apple and Samsung, which has its Gear IconX earbud set, the market has largely been occupied by niche manufacturers.

Still, it’s still good news for Apple. The company has kept its sales figures for the AirPods close to the chest, as filing AirPods sales under its “Other Products” category. But anecdotally, AirPods have remained a high-selling item among consumers. Apple’s ability to take over this market helps the company establish a presence in the space and popularizes wireless earbuds among consumers.

Plus, AirPods are also one of many Apple-owned products in the headphone space. Thanks to its ownership of Beats, Apple also has products like the BeatsX and Solo3 on the market. Plus, all feature proprietary Apple technology like its W1 wireless chip.

The success of AirPods also reflects the increasing comfort level consumers have with wireless headphone technology. As battery life and audio quality improve, more consumers are increasingly willing to switch out traditional headphones with wireless alternatives.